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HomeMy WebLinkAboutTB Penick & Sons Inc and Cross-Defendants; 2023-03-15;SETTLEMENT AGREEMENT AND MUTUAL RELEASE This Settlement Agreement and Mutual Release (hereinafter "AGREEMENT") is entered into by, between, and among Plaintiff, City of Carlsbad, (hereinafter "PLAINTIFF" or the "CITY"), Defendant and Cross-Complainant, T.B. Penick & Sons, fnc., (hereinafter "DEFENDANT" or "TB PENICK"), and Cross-Defendants, Alcorn Fence Company, A & P Drywall, Inc., Certified Concrete, Inc., G.A. Abell, Inc. dba Precision Electric Company, Lyons & Son Masonry, Inc., Interior Logic Group, Inc., successor in interest to Picketfence Design, Inc. dba PFD Floor Covering, N.Y. T ile and Marble, lnc., Mountain Movers, Queen City G lass Co., Glassforce, Inc., Scott Michael, Inc., SWCS, Inc., and Wally Hollyday (hereinafter collectively, ("CROSS-DEFENDANTS"), on behalf of themselves and their respective principals, agents, attorneys, officers, directors, shareho lders, servants, representatives, employees, members, pattners, subsidiaries, affili ated companies, insurers, third-party administrators, predecessors, successors-in-interest and assigns. All of the above-named individuals and entities are hereinafter collectively referred to as the "SETTLING PARTIES" in this AGREEMENT with respect to the claims described herein. This AGREEMENT is entered into by the SETTLING PARTIES in order to reach a settlement of disputes arising from PLAINTIFF's Complaint filed in the San Diego Superior Court in the County of San Diego, State of California, and containing allegations of defects from the construction of a public park and recreational facili ty known as Alga Norte Community Park which is located 6565 Alicante Road in the City of Carlsbad, County of San Diego, State of California (hereinafter "the PARK"), to avoid the fees and costs that would be incurred in litigation; and to minimize the fees and expenses that would continue to be incurred by the SETTLING PARTIES. In consideration of the promises made in this AGREEMENT, the SETTLING PARTIES agree to enter into thi s AGREEMENT on the terms listed herein. 1.0 Recitals 1.1 WHEREAS, on or about April 24, 2012, PLAINTIFF, City of Carlsbad, and DEFENDANT, T.B. Penick & Sons, Inc., entered into a Design-Build Agreement for the design and construction of the Park ("D-B AGREEMENT"). PLAINTIFF filed the Notice of Completion for the Park on June 10, 20 14. The D-B AGREEMENT included a five-year bumper to bumper warranty ("WARRANTY"). 1.2 WHEREAS, after project completion, PLAINTIFF placed DEFENDANT on notice of certain WARRANTY and construction defect claims. DEFENDANT accepted and resolved certain claims, and did not resolve others, which became disputed. 1.3 WHEREAS, on April 24, 2019, PLAINTIFF filed a Complaint (the "COMPLAINT") against DEFENDANT in the San Diego County Superior Court (hereinafter "SDSC"). The case is identified as SDSC Case No. 37-2019-000211 75-CU-BC-NC. DEFENDANT thereafter filed a Cross-Complaint against the CROSS-DEFENDANTS. The term "ACTION" includes the COMPLAINT and any and all claims and defect a llegations raised by PLAINTfFF against DEFENDANT and by DEFENDANT against CROSS-DEFENDANTS, as (01194625: I} Page I of9 well as claims in Cross-Actions made or capable of being made against PLAINTIFF or DEFENDANT by the SETTLING PARTIES arising from the ACTION. 1.4 WHEREAS, PLAINTIFF's COMPLAINT set forth certain WARRANTY/defect claims in connection with the construction of the PARK. All DEFENDANTS and CROSS- DEFENDANTS disputed all allegations of PLArNTIFF. 1.5 WHEREAS, during the course of the litigation, the SETTLING PARTIES engaged in multiple mediation sessions through JAMS, with the Hon. Stephan Sundvold (ret.), acting as mediator. During mediation, PLAINTIFF and DEFENDANT and certain CROSS- DEFENDANTS resolved certain WARRANTY/Defect claims by separate settlement agreements, which are not part of this AGREEMENT. 1.6 WHEREAS, the SETTLING PARTIES also appeared through their respective principals, counsel and insurance claims representatives and participated virtually in a mediation on November 30, 2022. Following extensive good faith negotiations among the parties through their respective counsel during and after the mediation and after further mediated settlement negotiations, the SETTLING PARTIES reached a fu ll and final settlement of the ACTION. 1.7 WHEREAS, it is the intent of the SETTLING PARTIES to fully and finally resolve the ACTION. The SETTLING PARTTES each recognize that litigation among themselves would require substantial time, effort, and expense unless the ACTION is settled and terminated between and among them and wish to reduce to writing the fu ll terms of their agreement and release. 1.8 The SETTLING PARTIES represent that each expressly has the authority to execute this AGREEMENT, and that this AGREEMENT as so executed will be binding upon each of them and that the representations set forth in thi s AGREEMENT shall endure forever and shall survive the execution of this AGREEMENT. 2.0 No Admission In making this AGREEMENT, the SETTLING PARTIES do not admit the sufficiency of any claims, allegations, assertions, contentions, or positions of any other party, or the sufficiency of any defenses to any such claims, allegations, assertions, contentions or positions. Further, in making this AGREEMENT, the SETTLrNG PARTIES agree that the covenant and release comprising this AGREEMENT are not intended to be admissions of liability, negligence, willful conduct, breach of contract, coverage, the duty to defend, the duty to indemnify or fault of any kind whatsoever, by any SETTUNG PARTY or any SETTLING PARTY's insurer(s). AGREEMENT AND RELEASE WHEREFORE, in consideration of the covenants and agreements expressed herein, and the recitals set forth above, which form a part of, and are incorporated into, this AGREEMENT, the SETTLING PARTIES hereto agree as follows: {01 194625 I} Page 2 of9 3.0 Settlement Terms 3.1 In exchange for the releases set forth in this AGREEMENT, the CITY has agreed to accept One Million Nine Hundred Twenty Three Thousand One Hundred N inety Two Dollars and No Cents ($1,923,192.00) (the "Total Settlement Amount"). The Total Settlement Amount must be paid to the CITY within thirty (30) calendar days after the CITY's execution of this Agreements. Any checks delivered to the CITY in satisfaction of DEFENDANT's and/or CROSS- DEFENDANTS' obligations under this Agreement shall be made payable to the City of Carl sbad. DEFENDANT and CROSS-DEFENDANTS, or their respective insurers, have agreed to pay the Total Settlement Amount in the monetary amounts set forth below ("SETTLEMENT PAYMENTS"): Party Settlement Amounts Alcorn Fence Company $55,000.00 Allied Concrete, Inc. $8,000.00 A & P Drywall, Inc., $200,000.00 Certified Concrete, Inc. $7,500.00 G.A. Abell , Inc. dba Precision Electric $15,000.00 Company, Lyons & Son Masonrv, Inc., $15,000.00 Interior Logic Group, Inc., successor tn $400,000.00 interest to Picketfence Design, Inc. dba PFD Floor Covering, and N. Y. Tile and Marble, Inc. Mountain Movers $7,500.00 Queen City Glass Co./Glassforce, Inc. $50,000.00 Scott Michael, r nc. $47,500.00 SWCS, Inc. $100,000.00 T.B. Penick & Sons, Inc. $1,007,692.00 Wally Hollyday $] 0,000.00 TOT AL SETTLEMENT AMOUNT $1,923,192.00 The above-noted Settlement Payments are inclusive of previous full or partial payments made by and on behalf of various parties to TB Penick, which are documented in the attached Exhibit A. 3.2 DEFENDANT and CROSS-DEFENDANTS will provide their full or remaining Settlement Payments to TB PENICK in sufficient time to allow TB PENICK to deliver the Total Settlement Amount to the CITY within 30 calendar days after the date the CITY signs the Settlement Agreement. The full or remaining settlement payments should be made payable to "Kennedy & Souza Client Trust Account," Tax ID: 33-0983178, and sent to: Kennedy & Souza, APC. c/o Daniel Ikeri, Esq., 7964 Arjons Drive, Suite I, San Diego, CA 92126. 3.3 Each SETTLING PARTY shall bear its own costs, attorney's fees, expert fees, and court fees incurred in relation to this ACTION. (01194625 I } Page3of9 3.4 Mutual Release Upon the payment of the Total Settlement Amount to the CITY, each of the SETTLING PARTlES hereby fully release and discharge all other SETTLING PARTIES from any and all actions, causes of action, agreements, demands, investigative costs, contracts, covenants, obligations, duties, damages, losses, additional insured defense obligations, liabilities and expenses of whatever kind or nature, in law, equity or otherwise, whether known or unknown, suspected or unsuspected, anticipated or unanticipated, which SETTLING PARTIES and their affiliates have, had, or hereafter may have, directly or indirectly, arising out of, in connection with, relating to or concerning this ACTION. 3.5 Waiver of California Civi l Code section 1542 The SETTLING PARTIES acknowledge that each of them has read the mutual releases in this AGREEMENT and have had the opportunity to di scuss the nature, contents, and implications of thi s release with their respective counsel and know and understand the full content and effect of this release. The SETTLING PARTIES further declare that each of them understands the fu ll nature, extent and import of Section 1542 of the California Civil Code. Accordingly, with such full knowledge and understanding, the SETTLING PARTIES hereby waive and relinquish any and all rights or benefits that they may have under the provisions of Section 1542 of the California Civil Code, with respect to the claims released hereby. California Civil Code section 1542 reads as fo llows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HA VE MATERlALL Y AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY. 4.0 Confidentiality The SETTLING PARTIES and their attorneys shall not affirmatively disclose the specific terms, conditions, and covenants of this AGREEMENT except: (i) where mutually agreed to in writing by the parties; (ii) where necessary to share such information with the patties' accountants or attorneys; (iii) where disclosure to a governmental entity, or CITY staff or officials is required; (iv) where disclosure is ordered by a court of competent jurisdiction; (v) where disclosure is required by the California Public Records Act or other government statute or public transparency requirement; or, (vi) when necessary to enforce this AGREEMENT or carry out its obligations. This confidentiality provision is a material term of this AGREEMENT, and its violation shall constitute a breach of this AGREEMENT. 5.0 General Conditions 5.1 Binding Agreement This AGREEMENT shall be binding upon and inure to the benefit of the SETTLING PARTIES and their respective insurers, successors, devisees, executors, affiliates, representatives, assigns, officers, directors, partners, agents, and employees. { 0 I 194625: I } Page 4 of9 5.2 Final Agreement Each SETTLING PARTY acknowledges that (1) this AGREEMENT and its reduction to final form is the result of extensive good faith negotiations among the parties through their respective counsel; (2) said counsel has carefully reviewed and examined this AGREEMENT for execution by said parties, or any of them; and (3) any statute or rule of construction that ambiguities are to be resolved against the drafting party shal I not be employed in the interpretation of this AGREEMENT. 5.3 Informed Consent The SETTLING PARTIES expressly state that they have consulted their respective attorneys of record herein concerning all portions of this AGREEMENT and the releases set forth above and have been fully advised by their own attorneys with respect to their rights and obligations hereunder. Each party hereto has cooperated in the drafting and preparation of this AGREEMENT and therefore any construction of the intent of the parties hereto or the language hereof to be made by a court of law shall not be presumptively construed against any of the parties hereto. 5.4 No Inducement Each SETTLING PARTY expressly warrants and represents that, in executing this AGREEMENT, it is not relying upon any representation, promise, inducement or statement made by or on behalf of any of the other persons or entities which/who are parties to this AGREEMENT, nor is any party relying on any omission or the absence of any statement, re presentation, promise or inducement not made herein. Each of the SETTLlNG PARTIES hereto expressly waives any right it might ever have to claim that this AGREEMENT was in any way induced by fraud. The SETTU NG PARTIES further represent that they have been represented by legal counsel during the course of the negotiations leading to the signing of this AGREEMENT, and that they have been advised by legal counsel with respect to the meaning of this AGREEMENT and its legal effect. The SETTLING PARTIES represent that each person signing this AGREEMENT has the authority necessary to execute the AGREEMENT on behalf of the party or entity for whom or which he or she is acting, and that upon execution of the AGREEMENT, it will be fully binding and enfo rceable in accordance with its terms, and that no other consent or approval of any kind is required or necessary for this AGREEMENT to be bind ing. The SETTLING PARTIES also hereby warranty and represent that they are the owners of all rights and claims released by this AGREEMENT and that they have not assigned, transferred, or conveyed those rights or claims to any other person or entity. 5.5 Modifications Thi s AGREEMENT may not be amended or modified except by a written instrument executed by all the SETTLING PARTIES to thi s AGREEMENT. (01194625: I} Page 5 of9 5.6 Litigation Costs Each of the Parties will bear its own attorn eys' fees and costs and will not seek recovery of litigation costs, experts' fees, investi gative fees, attorneys' fees, or other related fees and costs against the other as a result of or in connection with this Action. 5.7 Applicable Law Thi s AGREEMENT is made and entered into in the State of California, County of San Diego, and shall be deemed to have been executed and delivered within the State of California, and the rights and obligations of the parties hereunder shall be governed by, and construed, and enforced in accordance with the laws of the State of Californi a. 5.8 Counterparts This AGREEMENT may be executed by fax or email and in counterparts with the same effect as if all original signatures were placed on one document, and which, when taken together, shall constitute one original AGREEMENT. 5.9 Paragraph Headings Paragraph headings are for reference only and shall not affect the interpretation of any paragraph hereto. 5.10 Effective Date The SETTLING PARTIES hereto deem this AGREEMENT to be effecti ve as of the date that the AGREEMENT is fully executed by all SETTLING PARTIES. 5.11 Severability ln the event any condition, covenant or provision herein contained is held to be invalid, unenforceable, or void by any court of competent j urisdiction, the same shal I be deemed severable from the remainder of AGREEMENT and shall in no way affect any other condition, covenant or provision herein contained, and the remainder of AGREEMENT shall continue to be valid and enforceable. If such condition, covenant, or other provision shall be deemed invali d or unenforceable due to scope or breadth, such provision shall be deemed valid to the extent of the scope or breadth permitted by law. 5.12 Enforcement The SETTLING PARTIES agree that this AGREEMENT is a binding settlement pursuant to Cali fornia Code of Civil Procedure secti ons 664.6 and 664.7 and that the Superior Court of the State of California, County of San Diego, will retain j urisdi ction over the SETTLING PARTIES to enforce this AGREEMENT. Before the initiation of any enforcement action by any Party, the Party sha ll mediate the dispute with JAMS, Hon. Stephan Sundvold (ret.), or other mediator, in the event Judge Sundvold is unavailable. fn the event of any dispute, motion or action relating to {01194625:1) Page 6 of9 the interpretation or enforcement of this AGREEMENT, the prevaili ng party shall be entitled to attorney's fees actually incurred, together with expert witness expenses. and other costs relating to any such proceeding or litigation. 5.13 Cooperation The SETTLING PARTIES agree to cooperate Cully and execute any and all supplemental documents and to take all additional actions that may be necessary or appropriate to give full force and effect of the terms and intent of this AGREEMENT. 5.14 Execution Pursuant to C.C.P. *664.7 The SETTLING PARTIES hereby acknowledge that, to the extent a SETfLING PARTY is a bankrupt entity, dissolved corporation, suspended corporation, no longer in business and/or has no officers or representatives to execute this AGREEMENT, and to the extent the settl ement is approved by and/or being paid on bchalfof such SE'ITLING PARTY by a policy or pol icies of insurance. this AGREEMENT may be executed on behalf of the PARTY by counsel retained by such insurance carrier(s) pursuant to California Code of Civil Procedure section 664. 7. TN WITN ESS WHEREOF, the undersigned have executed this AGREEMENT and mutual release on the date affixed by their signature. Dated: February 16, 2023 APPROVED AS TO FORM: Cindie K. McMahon, City Attorney BY: Cindie K. McMahon City Attorney (Ol 19~C.25:I) ick, Cit Mana •er Page 7 nf'J Dated: February 22, 2023 Dated: Dated: Dated: Dated: Dated: Dated: { 0 I 194625: I } T.B. PENICK & SONS, INC. By: ----------------Chief Executive Officer ALCORN FENCE COMPANY By:---------------- A& P DRYWALL, INC. By:---------------- By: CERTIFIED CONCRETE, INC. ---------------- G.A. ABELL, INC. OBA PRECISION ELECTRlC COMPANY By:---------------- LYONS & SON MASONRY, INC. By:---------------- INTERIOR LOGIC GROUP, INC., SUCCESSOR IN INTEREST TO PICKETFENCE DESIGN, INC. OBA PFD FLOOR COVERING By:---------------- Page 8 of9 Dated: Dated: Dated: Dated: Dated: Dated: Dated: {01194625 I} E-Served: Feb 24 2023 4:00PM PST Via Case Anywhere T.B. PENICK & SONS, INC. By: ALCORN FENCE COMPANY By: ~ ~ 2.23.2023 A& P DRYWALL, INC. By: CERTIFIED CONCRETE, £NC. By: G.A. ABELL, lNC. OBA PRECISION ELECTRIC COMPANY By:---------------- L YONS & SON MASONRY, INC. By:--------------- INTERIOR LOGIC GROUP, INC., SUCCESSOR IN INTEREST TO PICKETFENCE DESIGN, INC. OBA PFD FLOOR COVERfNG By:---------------- Page 8 of9 Dated: Dated: Dated: Dated: Dated: Dated: {O I 194625: I) T.B. PENICK & SONS, INC. By: --------------- ALCORN FENCE COMPANY By:--------------- A&P DRYWALL, INC. By.;:-----::::::---,.. By: By: By: By: CERTIFIED CONCRETE, INC. --------------- G.A. ABELL, INC. DBA PRECISION ELECTRIC COMPANY --------------- LYONS & SON MASONRY, INC. --------------- INTERIOR LOGIC GROUP, INC., SUCCESSOR IN INTEREST TO PICKETFENCE DESIGN, INC. OBA PFD FLOOR COVERING --------------- Page 8 of9 Dated: Dated: Dated: Dated: Z -Z3 -23 Dated: Dated: Dated: {01193918:1] T.B. PENICK & SONS, INC. By: --------------- ALCORN FENCE COMP ANY By:--------------- A&P DRYWALL, INC. By: --------------- By: CERTIFIED CONCRETE, INC. G.A. ABELL, INC. DBA PRECISION ELECTRIC COMPANY --------------- LYONS & SON MASONRY, INC. By:--------------- By: INTERIOR LOGIC GROUP, INC., SUCCESSOR IN INTEREST TO PICK.ETFENCE DESIGN, INC. DBA PFD FLOOR COVERING --------------- Page 8 of9 Dated: T.B. PENICK & SONS, INC. By: Dated: ALCORN FENCE COMPANY By: Dated: A&P DRYWALL, INC. By: Dated: CERTIFIED CONCRETE, INC. By: Dated: G.A. ABELL, INC. OBA PRECISION ;?-Zt?~ Zo?Z. ~ ELECTRIC COMP ANY ~~ By: Dated: LYONS & SON MASONRY, INC. By: Dated: INTERIOR LOGIC GROUP, INC., SUCCESSOR IN INTEREST TO PICK.ETFENCE DESIGN, INC. DBA PFD FLOOR COVERING By: (01193918: I} Page 8 of9 Dated: Dated: Dated: Dated: Dated: '\ Dated: '3 _ \ ? _ '2., Dated: {01 19462.'i:1} By: By: By: By: By: By: T.B. PENICK & SONS, INC. --------------- ALCORN FENCE COMPANY --------------- A&P DRYWALL, INC. ------------- CERTIFIED CONCRETE, INC. --------------- G.A. ABELL, INC. DBA PRECISION ELECTRIC COMP ANY --------------- LYONS & SON MASONRY, INC. INTERIOR LOGIC GROUP, INC., SUCCESSOR IN INTEREST TO PICKETFENCE DESIGN, INC. DBA PFD FLOOR COVERING --------------- Page8 of9 DocuSign Envelope ID: 18FD287F-C33E-4225-84CB-5BC463A7CAF4 Dated: Dated: Dated: Dated: Dated: Dated: Dated: 2/18/2023 (0 I I 93918: I } T.B. PENICK & SONS, INC. By:----------------- By: By: By: By: By: ALCORN FENCE COMPANY ----------------- A&P DRYWALL, INC. ----------------- CERTIFIED CONCRETE, INC. ----------------- G.A. ABELL, INC. DBA PRECISION ELECTRIC COMPANY ----------------- LYONS & SON MASONRY, INC. ----------------- LNTERIOR LOGIC GROUP, INC., SUCCESSOR IN INTEREST TO PICKETFENCE DESIGN, INC. DBA PFD FLOOR COVERING r~;-n~ By : _L_~885~F ~5=15=64=85~446=2·~------------- John Scirnone, Chief Financial Officer Page 8 of9 Dated: 2--/ 4-2 3 N.Y.TILE AND MARBLE, rNC. By:/ ,fiJnd-LL - n unse execu ing pursua and limitations of CCP 664.7 Dated: QUEEN CITY GLASS CO. By: ----------------- Dated: GLASSFORCE. INC. By: ----------------- Dated: SCOTT MICHAEL, INC. By: ----------------- Dated: SWCS, rNC. By: ----------------- Dated: WALLY HOLLYDAY By: ----------------- Dated: MOUNTAIN MOVERS B {01193918: 11 Page 9 of9 Dated: N.Y.TILE AND MARBLE, INC. By: Dated: 2/24/23 QUEEN CITY GLASS CO. By: af;tffeN/ Ashley Evans, Vice President Dated: GLASSFORCE, INC. By: Dated: SCOTT MICHAEL, INC. By: Dated: SWCS, INC. By: Dated: WALLY HOLLYDAY By: ----------------- Dated: MOUNTAIN MOVERS B {01 194625: I } Page 9 of 9 Dated: Dated: D~ed: Feb.27,2023 Dated: Dated: Dated: Dated: {01194625: I} N.Y.TlLE AND MARBLE, JNC. By: ----------------- QUEEN CITY GLASS CO. By:----------------- GLASSFORCE, INC. By: ~S1f;;_c_._°'_n_a_•J~"'-· ~-~~e.--"'111'-r.,_~-~---~~ Insurance retained counsel executing pursuant to the rights and limitations of CCP 664.7 SCOTT MICHAEL, JNC. By: ----------------- SWCS, fNC. By:----------------- WALLY HOLLYDAY By: ----------------- MOUNTAIN MOYERS B Page 9 of9 E-Served: Mar 6 2023 2:33PM PST Via Case Anywhere Dated: N.Y.TILE AND MARBLE, INC. By: Dated: QUEEN CITY GLASS CO. By: Dated: GLASSFORCE, INC. By: Dated: 3/6/2023 SCOTT MICHAEL, INC. By: 460ft"~ Dated: SWCS, INC. By: Dated: WALLY HOLLYDAY By: ---------------- Dated: MOUNTAIN MOVERS B {01194625: 1} Page 9 of9 Dated: N.Y.TILE AND MARBLE, INC. By: Dated: QUEEN CITY GLASS CO. By: Dated: GLASSFORCE, INC. By: Dated: SCOTT MICHAEL, INC. By: Dated ef-// &,/ c). 3 B(4{d.i Dated: WALLY HOLLYDAY By: --------------- Dated: MOUNTAIN MOVERS B: {01194625:1} Page 9 of9 Dated: N. Y.TILE AND MARBLE, INC. By: ---------------- Dated: QUEEN CITY GLASS CO. By: ---------------- Dated: GL/\SSPORCE, INC. By: ---------------- Dated: SCOT!' MICHAEL. INC. By: ---------------- Dated: SWCS, INC. By: ---------------- Dated: 2 / 21/23 W/\LLY IIOLLYH' By•-u&➔~ Dated: MOUNTAIN MOVERS Bv: (Ol 19~625: I J Dated: N.Y.TILE AND MARBLE, INC. By: Dated: QUEEN CITY GLASS CO. By: Dated: GLASSFORCE, INC. By: Dated: SCOTT MlCHAEL, INC. By: Dated: SWCS, INC. By: Dated: WALLY HOLLYDAY By: (01194625: l} Page 9 of9